ASSIGNMENT FOR OCT 21, 2023

I. TESDA Law – Technical Education and Skills Development Authority

government agency tasked to manage and supervise technical education and
skills development in the Ph.
- Created by virtue of Republic Act 7796, otherwise known as the
Technical Education and Skills Development Act of 1994”.

* Century Canning Corp v. CA, G.R. No. 152894 August 17, 2007

FACTS:
1. Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish
cleaner" at petitioner’s tuna and sardines factory. Palad signed on 17 July 1997
an apprenticeship agreement with the petitioner. Palad received an apprentice
allowance of ₱138.75 daily.
2. On 25 July 1997, petitioner submitted its apprenticeship program for approval to
the Technical Education and Skills Development Authority (TESDA) of the
Department of Labor and Employment (DOLE). On 26 September 1997, the
TESDA approved the petitioner's apprenticeship program.
3. Petitioner Palad was dismissed because of a rating of N.I. or "needs
improvement" since she scored only 27.75% based on a 100% performance
indicator. Furthermore, according to the performance evaluation, Palad incurred
numerous tardiness and absences. As a consequence, petitioner issued a
termination notice dated 22 November 1997 to Palad, informing her of her
termination effective at the close of business hours of 28 November 1997.
4. Palad then filed a complaint for illegal dismissal, underpayment of wages,
and non-payment of pro-rated 13th month pay for the year 1997.
5. The labor arbiter dismissed the complaint for lack of merit but ordered the
petitioner to pay the last month salary and prorated the 13 month pay of the
respondents.
6. NLRC affirmed with modification rewarding two months of backwages. Palad
filed a special civil action for certiorari with the Court of Appeals.
7. The CA ruled that Palad was illegally dismissed, and the apprenticeship
agreement which Palad signed was not valid and binding because it was
executed more than two months before the TESDA approved petitioner’s
apprenticeship program.

ISSUE:
Whether the court of appeals committed reversible error in holding that private respondent
was not an apprentice.

RULING:
No, the court of appeals did not commit a reversible error in holding that private respondent
was not an apprentice.
In Republic Act No. 7796 (RA 7796), which created the TESDA, has transferred the
authority over apprenticeship programs from the Bureau of Local Employment of the DOLE
to the TESDA.

Furthermore, RA 7796 emphasizes TESDA’s approval of the apprenticeship program as

a pre-requisite for the hiring of apprentices.

The TESDA’s approval of the employer’s apprenticeship program is required before the
employer is allowed to hire apprentices. RA 7796, employers can only hire
apprentices for apprenticeable occupations which must be officially endorsed by a
tripartite body and approved for apprenticeship by the TESDA. This is to ensure the
protection of apprentices and to obviate possible abuses by prospective employers
who may want to take advantage of the lower wage rates for apprentices and circumvent the
right of the employees to be secure in their employment.

In this case, the apprenticeship agreement was entered into between the parties
before the petitioner filed its apprenticeship program with the TESDA for approval.

Petitioner and Palad executed the apprenticeship agreement on 17 July 1997 wherein it was
stated that the training would start on 17 July 1997 and would end approximately in
December 1997. On 25 July 1997, petitioner submitted for approval its apprenticeship
program, which the TESDA subsequently approved on 26 September 1997. Clearly, the
apprenticeship agreement was enforced even before the TESDA approved petitioner’s
apprenticeship program. Thus, the apprenticeship agreement is void because it
lacked prior approval from the TESDA.

Since Palad is not considered an apprentice because the apprenticeship agreement

was enforced before the TESDA’s approval of petitioner’s apprenticeship program,
Palad is deemed a regular employee performing the job of a "fish cleaner." Clearly,
the job of a "fish cleaner" is necessary in the petitioner's business as a tuna and
sardines factory. Under Article 280 of the Labor Code, an employment is deemed
regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.

The requisite TESDA approval of the apprenticeship program prior to the hiring of
apprentices was further emphasized by the DOLE with the issuance of Department
Order No. 68-04 on 18 August 2004. Department Order No. 68-04, which provides the
guidelines in the implementation of the Apprenticeship and Employment Program of
the government, specifically states that no enterprise shall be allowed to hire apprentices
unless its apprenticeship program is registered and approved by TESDA. And since Palad
was dismissed without just and authorize cause and was not afforded due process,
the CA is correct in holding that Palad was illegally dismissed.

Another answer:
The court emphasized that Republic Act No. 7796 transferred authority over apprenticeship
programs to TESDA, making its approval a prerequisite for hiring apprentices. In this case,
the apprenticeship agreement was signed before TESDA approved Century Canning’s
program, rendering it void. TESDA’s approval is essential to prevent abuse and ensure
apprenticeships are only allowed in highly technical industries and approved occupations.

As Palad’s apprenticeship agreement lacked TESDA’s prior approval, she was deemed a
regular employee, performing a necessary role in the company as a fish cleaner. Her
dismissal without just cause and due process was deemed illegal by the Court of Appeals,
reinforcing the significance of complying with TESDA’s approval process for apprenticeship
programs under relevant labor laws and regulations.

II. Magna Carta for Disabled Persons (Rep Act 7277) as amended by
Republic Act No. 9442
- Provides for the rehabilitation, self-development and self-reliance of disabled
persons and their integration into the mainstream of society.

- Republic Act No. 10524 or an Act Expanding the Positions Reserved for Persons
with Disability

SECTION 1. Equal Opportunity for Employment. – Section 5 of Republic Act

No. 7277, as amended, is hereby amended to read as follows:

“SEC. 5. Equal Opportunity for Employment. – No person with disability shall be

denied access to opportunities for suitable employment.

A qualified employee with disability shall be subject to the same terms and conditions of
employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.
“At least one percent (1%) of all positions in all government agencies, offices or
corporal ions shall be reserved for persons with disability: Provided, That private
corporations with more than one hundred (100) employees are encouraged to reserve
at least one percent (1%) of all positions for persons with disability.”

- Southern Luzon Drug Corp v. DSWD, April 25, 2017 G.R. No. 199669
(Definition of PWDs) Pursuant to the foregoing, the IRR of R.A. No. 9442 was
promulgated by the DSWD, Department of Education, DOF, Department of Tourism and
the Department of Transportation and Communications.8 Sections 5.1 and 6.1.d thereof
provide:

Sec. 5. Definition of Terms.

For purposes of these Rules and Regulations, these terms are defined as follows:
5.1. Persons with Disability are those individuals defined under Section 4 of RA
7277, "An Act Providing for the Rehabilitation, Self-Development and Self-Reliance of
Persons with Disability as amended and their integration into the Mainstream of Society and
for Other Purposes." This is defined as a person suffering from restriction or
different abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in a manner or within the range
considered normal for human being.

Disability shall mean:

(1) A physical or mental impairment that substantially limits one or more
psychological, physiological or anatomical function of an individual or activities of
such individual;
(2) A record of such an impairment; or
(3) Being regarded as having such an impairment.

FACTS:

When President Arroyo signed R.A 9257 that amended the P.A 7432, it retained the 20
percent discount on the purchase of medicines of the senior citizens. This act was followed
by DSWD IRR of RA 9257 that provided the cost of discount shall be allowed as deduction
from gross income for the same taxable year that the discount is granted. This change of the
tax allowing the senior citizen discount did not sit well with corporations and drug store
owner, hence they filed a case.

Carlos Superdrug I Corporation v. DSWD, docketed as G.R. No. 166494, assailing the
constitutionality of Section 4(a) of R.A. No. 9257 primarily on the ground that it amounts to
taking of private property without payment of just compensation. However, the court upheld
its validity and legality on the grounds of Police Power which is a legitimate exercise of
police power which has GENERAL WELFARE for its object.

In the present case, RA 7277 was enacted carrying the rights to grant 20 percent discount to
PWDs on their purchase of medicine pursuant to the IRR of RA 9442. The petitioners filed
for a petition for prohibition with Application for TRO and Writ of Preliminary Injunction with
the CA, seeking to declare as unconstitutional (a) Section 4(a) of R.A. No. 9257, and (b)
Section 32 of R.A. No. 9442 and Section 5.1 of its IRR, insofar as these provisions only
allow tax deduction on the gross income based on the net cost of goods sold or services
rendered as compensation to private establishments for the 20% discount that they are
required to grant to senior citizens and PWDs.

CA dismissed the petition, reiterating the ruling of the Court in Carlos Superdrug particularly
that Section 4(a) of R.A. No. 9257 was a valid exercise of police power and further ruled that
the same question has been resolved under CARLOS SUPERDRUG, the rule of STARE
DECISIS must be observed.

Petitioner, however, claims that the change in the tax treatment of the discount is
illegal as it constitutes taking without just compensation. It even submitted financial
statements for the years 2006 and 2007 to support its claim of declining profits when
the change in the policy was implemented.

ISSUE:
Whether or not the change in the tax treatment of the discount is illegal as it
constitutes taking without just compensation

RULING:
NO. The issue of just compensation finds no relevance in the instant case as the power
being exercised by the State in the imposition of senior citizen discount was its police
power. Unlike in the exercise of the power of eminent domain, just compensation is
not required in wielding police power. This is precisely because there is no taking
involved, but only an imposition of burden. In the exercise of police power, "property
rights of private individuals are subjected to restraints and burdens in order to secure the
general comfort, health, and prosperity of the State." The subjects of R.A. Nos. 9257 and
9442, are senior citizens and PWDs, are individuals whose well-being is a recognized public
duty.

In Article XIII, Section 1 of the Constitution, the State is mandated to give highest
priority to the enactment of measures that protect and enhance the right of all the
people to human dignity, reduce social, economic, and political inequalities, and
remove cultural inequities by equitably diffusing wealth and political power for the
common good.

Another answer:

The tax discount does not constitutes taking without just compensation, the State in the act
of discounting health services to the senior citizens and PWDs are all done under the Police
Power. In this power, the State imposes restriction or burdens in order to secure the general
comfort, health, and prosperity of the State."

RA 9257 and RA 9442 addresses the well-being of senior citizens and PWDs, aligning with
the Stae’s duty to protect human dignity and reduce social inequalities. Hence, the
legislatures method, treating discounts as tax deductions was deemed fair and reasonable.

- Bernardo et. al. v. NLRC, G.R. No. 122917 July 12, 1999

The noble objectives of Magna Carta for DisabledPersons are not based merely on charity
or accommodation, but on justice and the equal treatment of qualified persons, disabledor
not. In the present case, the handicap of petitioners (deafmutes) is not a hindrance to
their work. The eloquent proof of this statement is the repeated renewal of their
employment contracts. Why then should they be dismissed, simply because they are
physically impaired? The Court believes, that, after showing their fitness for the work
assigned to them, they should betreated and granted the same rights like any other
regular employees.

FACTS:
The forty-three (43) petitioners are deaf-mutes hired on various periods from 1988 to 1993
by Far East Bank and Trust Company as Money Sorters and Counters through a uniformly
worded agreement called “Employment Contract for Handicapped Workers”.

Far East Bank and Trust Company maintained that these employees are a special class of
workers because they were hired temporarily under a special employment arrangement,
which was a result of overtures made by civic and political personalities to the bank. The
bank adopted the special program to help deaf-mutes do manual work for the bank, in this
case – counting and sorting of bills, which were normally being performed by tellers.

Petitioners maintain that they should be considered regular employees, because their task
as money sorters and counters was necessary and desirable to the business of respondent
bank. They further allege that their contracts served merely to preclude the application of
Article 280 and to bar them from becoming regular employees.

ISSUE:
1. Whether or not the renewal of contracts led to the conclusion that their tasks were
beneficial and necessary to the bank
2. Whether or not the petitioners have garnered the regular employee status

RULING:
1. Yes. The renewal of the contracts of the handicapped workers and the hiring of
others lead to the conclusion that their tasks were beneficial and necessary to
the bank. More important, these facts show that they were qualified to perform the
responsibilities of their positions. In other words,

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as a
qualified able-bodied person.

2. Yes. In the case of De Leon vs NLRC, The primary standard, therefore, of

determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or
business of the employer. Necessarry and beneficial.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the
business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven
petitioners should be deemed regular employees.

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the simple
expedient of extending to them probationary appointments, ad infinitum." The contract
signed by petitioners is akin to a probationary employment, during which the
bank determined the employees' fitness for the job. When the bank renewed the
contract after the lapse of the six-month probationary period, the employees
thereby became regular employees. No employer is allowed to determine
indefinitely the fitness of its employees.

Thus, as regular employees, the twenty-seven petitioners are entitled to security of

tenure; that is, their services may be terminated only for a just or authorized cause.

III. Conditions of Employment (Article 82 of Pres Dec No. 442)

Article 82. Coverage.

The provisions of this Title shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government employees,
 managerial employees, field personnel, members of the family of the employer
who are dependent on him for support, domestic helpers, persons in the personal
service of another, and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.

As used herein, "managerial employees" refer to those whose primary duty

consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff.

"Field personnel" shall refer to non-agricultural employees who regularly

perform their duties away from the principal place of business or branch
office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.

a. Employer-employee relationship-
- - the employer has active supervision and control of their employees
who are doing the job, work, or service.
b. Test to determine existence
- CONTROL TEST
1) the selection and engagement of the employee;
2) the payment of wages;
3) the power of dismissal; and
4) the power to control the employee's conduct,
c. Employee vs. independent contractor
While employers are obligated to comply with Philippine labor laws in regards to
their employees, the same obligation does not apply to any independent contractors
they hire.

WAGES and contributions

Employers are bound by law to pay wages to their employees. These wages should
comply with the minimum wage established by law. Additionally, they are required to
cover the employer’s share for contributions such as their employees’ Pag-Ibig,
Philhealth, and SSS.
These obligations do not apply to clients of independent contractors. The payment
given to an independent contractor is compensation that is agreed upon in the contract
provided by their client. Independent contractors are also responsible for their own
contributions to Pag-Ibig, Philhealth, and SSS.

BENEFITS
Certain benefits under the law are provided to employees that independent
contractors are not entitled to, such as overtime pay, premium pay, holiday pay,
and 13th month pay, among others. Some employers also provide non-monetary
benefits such as maternity/paternity leave and parental leave.

TERMINATION
 There are key differences between terminating the relationship between an
employee versus an independent contractor in terms of basis, procedure, and
consequences.
Employers have the right to dismiss an employee only due to reasons that are
stated under Labor Code Articles 297 [282], 298 [283], and 299 [284].

The causes for termination stated under

Article 297 [282] are due to actions committed by the employee such as serious
misconduct and willful disobedience , gross and habitual neglect of duties, fraud
or willful breach of trust, commission of a crime or offense by the employee
against the employer or his duly authorized representatives, and other analogous
causes.

Article 298, on the other hand, states causes of termination due to installation
of labor-saving devices, redundancy, retrenchment and closure of the business.

Lastly, Article 299 [284] permits employers to terminate a contract between an

employee when the particular employee is suffering from any disease whose
continued employment is detrimental to their own health or the health of other
employees.

Clients who hire an independent contractor include valid reasons and the
procedure involved for terminating the relationship in the contract. Both parties may also
agree to cancel the contract at any point in time. In situations wherein there are no valid
reasons or procedures stated for terminating the contract, the contract can only be
terminated through filing a case in court.

1. Degamo v. Citihomes Builders & Devt Corp, G.R. No. 249737, September 15, 2021.
- Sales Agent are independent Contractors
Facts:
Degamo filed a Complaint for non-payment of commission fees against Citihomes.

Petitioner’s claim:
She was hired and was promoted as sales manager in Citihomes Builders with the following
tasks:
(1) solicit potential clients to buy or sell real properties;
(2) advise clients on prices, conditions, and other related information on real properties;
(3) supervise property consultants;
(4) man the booths of Citihomes or Citi Pro; and
(5) report to the office of Citihomes.

Due to low sales, petitioner filed a resignation letter effective April 30, 2017 but it was not
accepted by her direct superior, Ms. Evelyn Abapo (Ms. Abapo). Citihomes also refused to
pay her commission fees for the 18 real properties she successfully sold. Thus, petitioner
prayed that Citihomes be ordered to pay her commission fees plus moral and exemplary
damages.
Respondent’s: Petitioner was not its employee being a mere sales agent of Ms. Abapo, a
licensed broker, who possessed the power to hire and terminate petitioner; (2) that it did not
pay the wages of petitioner as the fees of sales agents come from the commissions it pays
to Ms. Abapo who will then make an allocation among her sales agents; (3) that it did not
exercise control over the means and methods by which petitioner performed her job as she
devised her own techniques and methods in soliciting buyers of real properties; and (4) that
there being no employer-employee relationship between the parties, Citihomes contended
that the Labor Arbiter has no jurisdiction over petitioner's complaint.

LA Ruling: Held that the in-house broker of Citihomes, Ms. Abapo, to be a labor-only
contractor and ruled that Citihomes was the real employer of petitioner
NLRC Ruling: set aside the findings of the Labor Arbiter and ruled that there was no
employer-employee relationship between Citihomes and petitioner.
CA Ruling: ruled that the NLRC did not gravely abuse its discretion when it reversed the
ruling of the Labor Arbiter and in holding that no employer-employee existed between
Citihomes and petitioner
.
Issue:
Whether there was an employer-employee relationship between Citihomes and
Degamo.

Ruling:
NO. The NLRC and the CA aptly determined that the four elements of employer-
employee relationship are not present at bar.

To ascertain the existence of an employer-employee relationship, jurisprudence has

invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employee's conduct or the so-called "control test."

Verily, the power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee
relationship. This is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used to
achieve that end.

In Royale Homes Marketing Corp. v. Alcantara, the Court held that there is [ S, N, E, P N ]
no employer-employee relationship between a real estate corporation and a sales
broker when the latter: (a) is subject to rules and regulations which do not interfere
with the means and methods of accomplishing the assigned tasks; (b) is not required
to observe definite working hours; (c) can engage in selling other products or engage
in unrelated business; (d) is paid compensation consisting of commission override,
budget allocation, sales incentive and other forms of company support but not fixed
monthly salary; and (e) is not entitled to statutorily mandated benefits.

Here, petitioner failed to present any proof of the purported procedure or regulations
which Citihomes allegedly implemented and imposed in the solicitation of sales and
dealing with prospective clients.
At any rate, that Citihomes required petitioner to maintain a monthly sales quota of
P5,000,000.00 and closely monitored her work three times a week in accordance with
its rules and regulations does not indicate that it had control over the means and
methods on petitioner's work. By the nature of the business of soliciting sales on behalf of
a real estate corporation, sales agents are normally left free to devise ways and means of
persuading people to buy properties. Besides, even assuming that Citihomes monitored
petitioner's working hours and set a certain sales quota on her, it is not the kind of control
which the law contemplates that would result in an employer-employee relationship. It is
merely imposed to achieve a certain production level wherein incentives are given when a
particular performance is reached. Simply put, the purported rules and regulations do not
pertain to the means and methods of accomplishing the task of petitioner.

2. Valencia v. Classique Vinyl Products Corp., G.R. No. 206390 January 30, 2017

Facts:

Valencia alleged that he applied for work with Classique Vinyl but was told by the
latter's personnel office to proceed to CMS, a local manpower agency, and therein
submit the requirements for employment.

Upon submission thereof, CMS made him sign a contract of employment but no copy of
the same was given to him. He then proceeded to Classique Vinyl for interview and
thereafter started working for the company. Valencia averred that his salary was paid on
a weekly basis but his pay slips neither bore the name of Classique Vinyl nor of CMS; that
all the machineries that he was using/operating in connection with his work were all owned
by Classique Vinyl; and that his work was regularly supervised by Classique Vinyl. He further
averred that he worked for Classique Vinyl for four years until his dismissal. Hence, by
operation of law, he had already attained the status of a regular employee of his true
employer, Classique Vinyl, since according to him, CMS is a mere labor-only contractor.
Valencia, therefore, argued that Classique Vinyl should be held guilty of illegal dismissal for
failing to comply with the twin-notice requirement when it dismissed him from the service and
be made to pay for his monetary claims.

Classique Vinyl averred that it cannot be made to pay the same since it is an establishment
regularly employing less than 10 workers. As such, it is exempted from paying the
prescribed wage orders in its area and other benefits under the Labor Code. At any rate,
Classique Vinyl insisted that Valencia's true employer was CMS, the latter being an
independent contractor.

Issue:
1. Whether there exists an employer-employee relationship between Classique Vinyl and
Valencia.
2. Whether or not CMS is a legitimate labor only contractor.

Ruling:
1. NO.The burden of proof rests upon the party who asserts the affirmative of an
issue’. Since it is Valencia here who is claiming to be an employee of Classique
Vinyl, it is thus incumbent upon him to offer evidence to prove the existence of
 employer-employee relationship between them. He "needs to show by substantial
evidence that he was indeed an employee of the company against which he
claims illegal dismissal."

Corollary, the burden to prove the elements of an employer-employee

relationship, viz.: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power of control, lies upon Valencia.
In this case, however, Valencia failed to present competent evidence, documentary or
otherwise, to support his claimed employer-employee relationship between him and
Classique Vinyl. All he advanced were mere factual assertions unsupported by proof.

2. Yes. "Genera1ly, the presumption is that the contractor is a labor-only unless

such contractor overcomes the burden of proving that it has the substantial
capital, investment, tools and the like."
GN: A contractor is a labor only contractor unless proven otherwise by means of substantial
capital, investment, tools and the like.

NOTE: Contractors are employers

Here, to prove that CMS was a legitimate contractor, Classique Vinyl presented the
former's Certificate of Registration with the Department of Trade and Industry
and, License as private recruitment and placement agency from the
Department of Labor and Employment. Indeed, these documents are not
conclusive evidence of the status of CMS as a contractor. However, such fact of
registration of CMS prevented the legal presumption of it being a mere labor-
only contractor from arising.
In any event, it must be stressed that "in labor-only contracting, the statute creates
an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the
principal employer and the latter is responsible to the employees of the labor-
only contractor as if such employees had been directly employed by the
principal employer. The principal employer therefore becomes solidarily liable
with the labor-only contractor for all the rightful claims of the employees."

The facts of this case, however, failed to establish that there is any circumvention of
labor laws as to call for the creation by the statute of an employer-employee
relationship between Classique Vinyl and Valencia. In fact, even as against CMS,
Valencia's money claims has been debunked by the labor tribunals and the CA.
Again, the Court is not inclined to disturb the same.

3. Dusol v. Lazo, G.R. No. 200555, January 20, 2021

Facts:
This case arose from a complaint for illegal dismissal, underpayment of benefits, claim
for damages, and attorney's fees filed by petitioners Pedro (Pedro) and Maricel Dusol
(Maricel) against respondent Emmarck A. Lazo (Emmarck) as the owner of Ralco Beach.
Pedro and Maricel, on January 6, 1993, Pedro started working as the caretaker of the
Ralco Beach. Sometime in July 2008, Emmarck notified Pedro and Maricel that he will be
leasing out Ralco Beach. Thus, their services are no longer needed. They filed a complaint
asserting that they were illegally dismissed.

Respondent’s: Emmarck denied the employment relationship with Pedro and Maricel, and
asserted that they were his industrial partners. Pedro became an industrial partner of her
mother in the fishpond business. Similarly, Maricel was taken in as an industrial partner to
manage the store inside the beach property. Emmarck stressed that he had no control over
Pedro and Maricel, and in fact did not control or guide them since he left the entire business
operation to them.

Issue:
1. Whether Pedro and Maricel are employees or partners of Emmarck.

Ruling:
1. YES.

In determining whether an employer-employee relationship exists between the parties,

the following elements must be present: (1) selection and engagement of services; (2)
payment of wages; (3) the power to hire and fire; and (4) the power to control not only
the end to be achieved, but the means to be used in reaching such an end.”It was
further held that the most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to be done, but also as
to the means and methods to accomplish it.

In the case, Emmarck had the power to control their conduct in the performance
of their duties. The existence of control is manifestly shown by Emmarck's
express admission that he left the entire business operation of the Resort to
Pedro and Maricel. While Pedro and Maricel are to a large extent allowed to carry
out their respective duties as caretaker and store keeper on their own, this does
not negate the existence of control. It was Emmarck himself, who gave Pedro and
Maricel immense flexibility in the performance of their duties. This, alone, clearly
shows that Emmarck had control over the conduct of Pedro and Maricel in
performing their duties.

Other important points:

No particular form of evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence to prove the relationship
may be admitted. However, a finding that such relationship exists must still rest on
some substantial evidence.

4. Tongko v. The Manufacturers Life Insurance Co., G.R. No. 167622 January 25,
2011

Facts:
In his Motion for Reconsideration, petitioner reiterates the arguments he had
belaboured in his petition and various other submissions. He argues that for 19 years, he
performed administrative functions and exercised supervisory authority over employees and
agents of Manulife, in addition to his insurance agent functions. 4 In these 19 years, he was
designated as a Unit Manager, a Branch Manager and a Regional Sales Manager, and now
posits that he was not only an insurance agent for Manulife but was its employee as well.

The petitioner asserts in his Motion that Manulife’s control over him was demonstrated
(1) when it set the objectives and sales targets regarding production, recruitment and
training programs; and (2) when it prescribed the Code of Conduct for Agents and the
Manulife Financial Code of Conduct to govern his activities.5

ISSUES: Whether the Supreme Court erred in issuing the June 29, 2010 resolution,
reversing its earlier decision that an employer-employee relationship existed?

Ruling:
NO. The Supreme Court finds no reason to reverse the June 29, 2010 decision.

Control over the performance of the task of one providing service both with respect to the
means and manner, and the results of the service is the primary element in determining
whether an employment relationship exists. The Supreme Court ruled petitioners Motion
against his favor since he failed to show that the control Manulife exercised over him
was the control required to exist in an employer-employee relationship; Manulifes
control fell short of this norm and carried only the characteristic of the relationship between
an insurance company and its agents, as defined by the Insurance Code and by the law of
agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements
of control specific to an insurance agency, which do not amount to the elements of control
that characterize an employment relationship governed by the Labor Code. The Insurance
Code provides definite parameters in the way an agent negotiates for the sale of the
company’s insurance products, his collection activities and his delivery of the insurance
contract or policy.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually
desirable result intended by the contractual relationship; they must have the nature of
dictating the means and methods to be employed in attaining the result. Tested by this
norm, Manulifes instructions regarding the objectives and sales targets, in connection
with the training and engagement of other agents, are among the directives that the
principal may impose on the agent to achieve the assigned tasks. They are targeted
results that Manulife wishes to attain through its agents. Manulifes codes of conduct,
likewise, do not necessarily intrude into the insurance agents means and manner of
conducting their sales. Codes of conduct are norms or standards of behavior rather than
employer directives into how specific tasks are to be done. In sum, the Supreme Court found
absolutely no evidence of labor law control.

5. David v. Macasio, G.R. No. 195466 July 2, 2014 PAKYAW/ HOLIDAY BENEFITs

Facts:
In January 2009, Macasio filed before the LA a complaint against petitioner Ariel L. David,
doing business under the name and style “Yiels Hog Dealer,” for non-payment of overtime
pay, holiday pay and 13th month pay.
He also claimed payment for moral and exemplary damages and attorney’s fees. Macasio
also claimed payment for service incentive leave (SIL), David claimed that he started his hog
dealer business in 2005 and that he only has ten employees. The LA concluded that as
Macasio was engaged on “pakyaw” or task basis, he is not entitled to overtime, holiday, SIL
and 13th month pay. The NLRC affirmed the LA decision, thus this case reach the CA which
says that Macasio is entitled to his monetary claims following the doctrine laid down in
Serrano v. Severino Santos Transit. The CA explained that as a task basis employee,
Macasio is excluded from the coverage of holiday, SIL and 13thmonth pay only if he is
likewise a “field personnel.”Thus this case reached the Supreme Court.

Issue: Whether or not Macasio is as a pkayaw or task basis personnel is entitled of overtime
pay, holiday pay, 13th month pay and payment for service incentive leave

Ruling:

Yes, but not the the grant of 13 month pay.

The Court ruled, the payment of an employee on task or pakyaw basis alone is insufficient to
exclude one from the coverage of SIL and holiday pay. They are exempted from the
coverage of Title I (including the holiday and SIL pay) only if they qualify as “field
personnel.”

The Labor Code states that field personnel are those employees that worked outside their
principal’s office, whereas in the case, Macasio regularly performed his duties at David’s
principal place of business; second, his actual hours of work could be determined with
reasonable certainty; and, third, David supervised his time and performance of duties.

Since Macasio cannot be considered a “field personnel,” then he is not exempted from the
grant of holiday, SIL pay even as he was engaged on “pakyaw” or task basis.

However, the governing law on 13th month pay is PD No. 851. P.D. No. 851 enumerates
the exemptions from the coverage of 13th month pay benefits. Under Section 3(e),
“employers of those who are paid on task basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the performance thereof are
exempted.

6. Lopez v. Bodega City, G.R. No. 155731 September 3, 2007

Facts:
Lolita Lopez (petitioner) was a lady keeper of Bodega City, herein corporation respondent
represented by its owner/ manager Andres C. Torres-Yap.

An incident happened wherein it involves petitioner acting hostile against a lady customer
who informed the management, which led Yap to make Lolita explain. Fifteen days after, in
a subsequent letter, he informed about her that they have decided to terminate the
concessionaire agreement between them in connection with the incident.
In turn, Lolita filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal
alleging that she was dismissed from her employment without cause and due process.
Respondent says that no employer-employee relationship existed between them and her
services was by vitue of a concessionaire agreement.

Hence this petition to the Supreme Court.

Issue:
Whether or not petitioner is an employee of respondents.

Ruling:
NO.
To ascertain the existence of an employer-employee relationship, jurisprudence has
invariably applied the four-fold test, namely: (1) the manner of selection and engagement; (2)
the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the
presence or absence of the power of control. Of these four, the last one is the most
important. The so-called "control test" is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship.

To prove the element of payment of wages, petitioner presented a petty cash voucher
showing that she received an allowance for five (5) days. A solitary petty cash voucher
did not prove that petitioner had been receiving salary from respondents or that she
had been respondents' employee for 10 years If the petitioner was really an employee
of respondents for that length of time, she should have been able to present salary
vouchers or pay slips and not just a single petty cash voucher.

8. Sonza v. ABS-CBN, G.R. No. 138051 June 10, 2004

A Talent is not a regular employee. No employee-employer relationship
exists.
FACTS:
In May 1994, ABS-CBN Broadcasting Corporation (ABS-CBN) signed an agreement with the
Mel and Jay Management and Development Corporation (MJMDC), represented by Jose Y.
Sonza and Carmela Tiangco, to exclusively provide Sonza's services as a talent for radio
and television. The agreement outlined Sonza's roles, and ABS-CBN agreed to pay him
monthly talent fees.
In April 1996, Sonza resigned and filed a complaint against ABS-CBN. SONZA filed a
complaint against ABS-CBN before the Department of Labor and Employment, National
Capital Region in Quezon City. SONZA complained that ABS-CBN did not pay his salaries,
separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance
and amounts due under the Employees Stock Option Plan ("ESOP").
ABS-CBN initially filed a motion to dismiss, arguing there was no employer-employee
relationship. Despite the ongoing dispute, ABS-CBN continued to pay Sonza's talent fees
through a bank account. The Labor Arbiter denied the motion to dismiss, allowing the case
to proceed. After the parties submitted their position papers, the Labor Arbiter eventually
dismissed the case, stating that Sonza was not an employee but a talent with specific skills
and a unique contract.
The Labor Arbiter held that:
  a "talent" cannot be considered as an employee by reason of the peculiar
circumstances surrounding the engagement of his services.·
 Whatever benefits the complainant enjoyed arose from specific agreement by the

parties and not by reason of employer-employee relationship.

SONZA appealed to the NLRC. On 24 February 1998, the NLRC rendered a Decision
affirming the Labor Arbiter’s decision.

ISSUE: Whether or not there exists an employee- employer relationship between Sonza and
ABS-CBN – NO.
RULING:
The Supreme Court upheld the decision of the NLRC and the CA.
Case law has consistently held that the elements of an employer-employee relationship are:
(a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer’s power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called "control test", is
the most important element.

First element: Selection and engagement of employees

Independent contractors often present themselves to possess unique skills, expertise or
talent to distinguish them from ordinary employees. The specific selection and hiring of
SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary
employees, is a circumstance indicative, but not conclusive, of an independent contractual
relationship. If SONZA did not possess such unique skills, talent and celebrity status,
ABS-CBN would not have entered into the Agreement with SONZA but would have
hired him through its personnel department just like any other employee.

Second element: Payment of wages

All the talent fees and benefits paid to SONZA were the result of negotiations that led
to the Agreement. If SONZA were ABS-CBN’s employee, there would be no need for the
parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay" which the
law automatically incorporates into every employer-employee contract. Whatever benefits
SONZA enjoyed arose from contract and not because of an employer-employee relationship.
The power to bargain talent fees way above the salary scales of ordinary employees is a
circumstance indicative, but not conclusive, of an independent contractual relationship.

Third element: Power of dismissal

For violation of any provision of the Agreement, either party may terminate their relationship.
SONZA failed to show that ABS-CBN could terminate his services on grounds other than
breach of contract, such as retrenchment to prevent losses as provided under labor laws.
Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because
ABS-CBN remained obligated to pay SONZA’s talent fees during the life of the Agreement.
This circumstance indicates an independent contractual relationship between SONZA and
ABS-CBN.
Plainly, ABS-CBN adhered to its undertaking in the Agreement to continue paying SONZA’s
talent fees during the remaining life of the Agreement even if ABS-CBN cancelled SONZA’s
programs through no fault of SONZA.

Fourth element: Power of Control

The United States Court of Appeals, First Circuit, recently held in Alberty-Vélez v.
Corporación De Puerto Rico Para La Difusión Pública ("WIPR") that a television program
host is an independent contractor.

Applying the control test to the present case, SONZA is not an employee but an
independent contractor. The control test is the most important test our courts apply in
distinguishing an employee from an independent contractor. This test is based on the
extent of control the hirer exercises over a worker. The greater the supervision and
control the hirer exercises, the more likely the worker is deemed an employee. The
opposite holds true as well – the less control the hirer exercises, the more likely the
worker is considered an independent contractor.

Lastly, the court clarified that being an exclusive talent, as stipulated in the Agreement, did
not automatically make SONZA an employee. Exclusivity is a common practice in the
entertainment industry and serves to protect the broadcast station's investment. SONZA
received a higher fee for his exclusivity, which compensated for this arrangement.
Individuals with special skills, expertise or talent enjoy the freedom to offer their
services as independent contractors. The right to life and livelihood guarantees this
freedom to contract as independent contractors. The right of labor to security of
tenure cannot operate to deprive an individual, possessed with special skills,
expertise and talent, of his right to contract as an independent contractor. An
individual like an artist or talent has a right to render his services without any one
controlling the means and methods by which he performs his art or craft. If radio and
television program hosts can render their services only as employees, the station owners
and managers can dictate to the radio and television hosts what they say in their shows.
This is not conducive to freedom of the press.
Hence, the court dismissed Sonza’s petition.

8. Dynamiq Multi-Resources v. Genon, G.R. No. 239349, June 28, 2021

FACTS:
An Amended Complaint for non-payment of 13 th month pay, illegal deductions, moral and
exemplary damages, and attorney's fees was filed by Orlando Genon (Genon) against
Dynamiq Multi-Resources, Inc. (Dynamiq) before the NLRC-National Capital Region.

Genon worked as a truck driver for Dynamiq, a hauling business, from September 10, 2009
until he resigned on June 3, 2014. During his employment, he was made to work from
Monday to Saturday and received his salary every 15th day of the month. Cash bond,
insurance, and phone bills were deducted from his salary. When he resigned, Dynamiq
refused to return his cash bond and other deductions. Moreover, he avowed that he was not
given his 13th month pay during his employment. To bolster his claim, he submitted his
driver's itinerary from January 2011 until May 2014 and pay slips.

Disagreeing with the foregoing averments, Dynamiq maintained that their Agreement
showed no employer-employee relationship as Genon was merely an independent
contractor paid on commission basis. As such, he was not entitled to 13 th month pay.

ISSUE:
1. Whether or not an employee- employer relationship exists between Genon and
Dynamiq- YES.
2. Whether or not Genon is considered as a regular employee and thus entitled to 13 th
month pay. -YES.

RULING:
1. In the case of Felicilda v. Uy, the Court held:
To ascertain the existence of an employer-employee relationship, the Supreme Court has
invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control
the employee's conduct, or the so-called '"control test." Verily, the power of the employer to
control the work of the employee is considered the most significant determinant of the
existence of an employer-employee relationship. This is the so-called "control test," and is
premised on whether the person for whom the services are performed reserves the
right to control both the end achieved and the manner and means used to achieve
that end. It must, however, be stressed that the "control test" merely calls for the existence
of the right to control, and not necessarily the exercise thereof. To be clear, the test does not
require that the employer actually supervises the performance of duties by the employee.
All four (4) elements are present in this case:

First. It is undisputed that Dynamiq hired Genon as a truck driver for its hauling business.

Second. Genon received compensation from Dynamiq for the services he rendered as
evidenced by the former's payslips. The Court agrees with the CA that contrary to the
findings of the NLRC, while wages paid were determined on a "per trip" or commission
basis, it has been constantly ruled that such does not negate employment relationship.
Wages are defined as "the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer
to an employee under a written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered." That Genon was paid on a "per trip" or
commission basis is insignificant as "this is merely a method of computing compensation,
not a basis for determining the existence or absence of an employer-employee relationship."

Third, Dynamiq's power to dismiss was inherent in the selection and engagement of
Genon as a truck driver.

Fourth. The presence of the element of control, the most important element to determine
the existence or absence of employment relationship, can be safely deduced from the fact
that: (a) the trucks used by Genon to perform his job were owned by Dynamiq; (b) the
hauling trips completed by Genon were exclusively for Dynamiq's clients; and (c) the
schedule and route to be followed by Genon were determined and strictly monitored
by Dynamiq.

2. Genon is a regular employee.

Article 295 of the Labor Code provides that an employment shall be deemed regular
where the employee has been engaged to perform activities which are usually desirable
in the usual course of business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. Further, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that
activity to the business.

Being a truck driver of a hauling business, Genon necessarily performed an activity

connected with the usual course of business or trade of Dynamiq. Moreover, having worked
as a truck driver since 2009, or for almost five (5) years, with Dynamiq, the repeated and
continuing need for his services is sufficient evidence of the necessity of his activity
to Dynamiq's business.

Having established that an employer-employee relationship exists between the parties and
having ruled that Genon was a regular employee, then the payment of 13 th month pay, as
mandated by law, is legally justified.

Although Genon was paid on a commission basis, he is a regular employee. It should be

remembered that a regular status of employment is not based on how the salary is paid to
an employee. An employee may be paid purely on commission and still be considered a
regular employee. As a regular employee, Genon is entitled to receive 13th month pay.

9. Reyes v. Glaucoma Research Foundation, Inc., G.R. No. 189255 June 17, 2015

FACTS:
Petitioner alleged that he was hired by respondent as administrator of the latter's Eye
Referral Center. He performed his duties as administrator and received his monthly salary of
P 20,000.00 until the end of January 2005.

The respondents claimed that there is no employer-employee relationship between them

because respondents had no control over the petitioner in terms of working hours as
he reports for work at any time of the day and leaves as he pleases. Respondents also
had no control as to the manner in which he performs his alleged duties as consultant. With
this, petitioner was not illegally dismissed by the respondent.
LA dismissed the complaint as petitioner failed to establish that the elements of an
employer-employee relationship existed. His actions were neither supervised nor controlled
by the management of the ERC; he also did not observe working hours by reporting for work
and leaving as he pleased; and, he was receiving allowances, not salaries, as a consultant.
NLRC reversed and ruled that it was incumbent for respondents to discharge the burden of
proving that petitioner's dismissal was for cause and effected after due process was
observed.
CA reinstated the LA decision.
Issue: WON employer-employee relationship exists between the petitioner and the
respondents.

Held:
No. Etched in an unending stream of cases are four standards in determining the existence
of an employer-employee relationship, namely: (a) the manner of selection and engagement
of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of
power of dismissal; and, (d) the presence or absence of control of the putative employee's
conduct. Most determinative among these factors is the so-called "control test."

Indeed, the power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee
relationship. This test is premised on whether the person for whom the services are
performed reserves the right to control both the end achieved and the manner and means
used to achieve that end.

Well settled is the rule that where a person who works for another performs his job more or
less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions
of work, and is compensated according to the result of his efforts and not the amount
thereof, no employer-employee relationship exists.

What was glaring in the present case is the undisputed fact that petitioner was never
subject to definite working hours.

This Court has held that there is no employer-employee relationship where the supposed
employee is not subject to a set of rules and regulations governing the performance of his
duties under the agreement with the company he is not required to report for work at any
time, nor to devote his time exclusively to working for the company.

Aside from the control test, the Supreme Court has also used the economic reality test in
determining whether an employer-employee relationship exists between the parties. Under
this test, the economic realities prevailing within the activity or between the parties are
examined, taking into consideration the totality of circumstances surrounding the true nature
of the relationship between the parties. This is especially appropriate when, as in this case,
there is no written agreement or contract on which to base the relationship. In our
jurisdiction, the benchmark of economic reality in analyzing possible employment
relationships for purposes of applying the Labor Code ought to be the economic dependence
of the worker on his employer.

10. Ditiangkin v. Lazada E-Services, G.R. No. 246892. September 21, 2022

Facts: In February 2016, Chrisden Ditiangkin and several others each executed an
Independent Contractor Agreement with Lazada E-Services Philippines, Inc. whereby they
agreed to be riders for Lazada. Lazada is an online selling site which allows sellers to sell
their products online via their website or mobile application. The primary task of the riders is
to pick up items for sale from sellers and then bring those items to Lazada’s warehouse. The
contract specified that the duration of their agreement will be for one year or until February
2017; that the riders shall be paid Php1,200.00 a day, and that the riders shall use their own
motorcycles, among others.

In January 2017, the riders were told that they were no longer given any schedules.
They still reported for work for three days until they learned that their routes were
given to other riders. Ditiangkin et al then filed a labor case against Lazada for illegal
dismissal.

In its defense, Lazada averred that the riders are independent contractors as proven by
their contract; that after the December 2016 holidays, the demand for riders went
down hence they had to reorganize their riders’ schedules; that the contracts of the riders
were not terminated.
The Labor Arbiter ruled in favor of Lazada. The NLRC affirmed the decision of the labor
arbiter. The Court of Appeals dismissed the appeal filed by Ditiangkin et al on the ground
that the remedy used was improper.

ISSUE: Whether or not the riders are regular employees of Lazada.

HELD: Yes. The Court reversed the rulings of the Labor Arbiter, the National Labor Relations
Commission, and the Court of Appeals, which all dismissed the petitioners’ complaint for
lack of employer-employee relationship. The Court held that the petitioners are regular
employees because they perform activities which are necessary and desirable in the
usual business of Lazada, which is not only providing an online platform but also
delivering goods and services to customers.

Employer-employee relationship generally is not determined by contract, but by law

which states that an employee performing an activity which are mecessary and
desirable in the usual business of an employer is a regular employee.

Under the four-fold test, to establish an employer-employee relationship, four factors must
be proven: (a) the employer’s selection and engagement of the employee; (b) the payment
of wages; (c) the power to dismiss; and (d) the power to control the employee’s conduct. All
these are present in this case:
(a) Despite how the contract was named, it was clear that Ditiangkin et al were directly hired
by Lazada;
(b) Ditiangkin et al were paid Php1,200.00 a day;
(c) The contract stated that Lazada may immediately terminate the contract for any breach;
and
(d) Lazada imposed strict rules on how the riders’ work is carried out. Lazada requires the
accomplishment of a route sheet which keeps track of the arrival, departure, and unloading
time of the items. Ditiangkin et al shoulder a penalty of P500.00 if an item is lost on top of its
actual value. Ditiangkin et al were also required to submit trip tickets and incident reports to
Lazada.

Even if we consider these instructions as mere guidelines, the circumstances of the whole
economic activity between petitioners and respondents confirm the existence of an
employer-employee relationship. The services performed by Ditiangkin et al are integral
to Lazada’s business. Lazada insist that the delivery of items is only incidental to their
business as they are mainly an online platform where sellers and buyers transact.
However, the delivery of items is clearly integrated in the services offered by Lazada.
Lazada could have left the delivery of the goods to the sellers and buyers is of no
moment because this is evidently not the business model they are implementing.

The Court rejected Lazada’s argument that the petitioners are independent
contractors based on their Contract, which is contrary to law and public policy. The
Court emphasized that labor contracts are imbued with public interest and must yield
to the common good. The Court also ruled that the petitioners are not fixed-term
employees as they do not have bargaining power or special skills that would justify a
fixed-term employment. The Court ordered Lazada to reinstate the petitioners to their
former positions and to pay their full backwages and other benefits. The Court
remanded the case to the Labor Arbiter for the computation of the total monetary
awards due to the petitioners.